One of the things I do at work is review spreadsheets for budgets, making sure that all the numbers add up and checking that the formulas link to the right cells. The reason I do it is because it’s not outside the realm of possibility that someone can make a mistake. I have people check my work, too. If we make a mistake, we can be in real trouble when submitting a budget or a financial report.
As Kevin Drum notes, checking your work didn’t seem to occur to these people.
From Mike Konczal, summarizing a new study that says Carmen Reinhart and Ken Rogoff made a coding error in a famous paper claiming that economic growth slows down in countries with debt levels above 90 percent of GDP:
If this error turns out to be an actual mistake Reinhart-Rogoff made, well, all I can hope is that future historians note that one of the core empirical points providing the intellectual foundation for the global move to austerity in the early 2010s was based on someone accidentally not updating a row formula in Excel.
I hate it when that happens.
So what? Well, for one thing, a number of people on Capitol Hill are relying on this data to make the case for cutting spending in Washington.
House Budget Committee Chairman Paul Ryan (R-Wis.), at the height of the Republicans’ debt-ceiling crisis in 2011, said he and his party were justified in prioritizing immediate debt reduction. Economists, he said at the time, “tell us that letting total debt rise above 90% of GDP creates a drag on economic growth.”
Ryan didn’t say which economists, but it didn’t much matter since everyone knew exactly what he was referring to. Carmen Reinhart and Kenneth Rogoff published a report a few years ago that conflicted with the findings of many economists, but told Republicans exactly what they wanted to hear — when a nation’s debt climbs above 90% of the nation’s total economy, it necessarily serves as a drag on economic growth.
Ryan, conservative activists, deficit hawks, the Washington Post editorial board, and the DC establishment waved around the Reinhardt/Rogoff study as definitive proof that debt reduction can’t wait — failing to reduce the deficit, or making it worse on purpose as nutty liberals like me prefer, makes an economic recovery practically impossible. Austerity measures, intended to reduce the budget shortfall, would in turn correct the problem help the economy grow.
Why let a simple thing like arithmetic stand in the way of a political juggernaut?